Direct Shipment of Wine Could Soon be Allowed in Maryland

byLindsey A. ZahnonMarch 30, 2011

Note: There were several corrections made to this entry post-publication. The author would like to specifically point out that direct shipment is not yet allowed in Maryland, but it appears that direct shipment will soon be available in Maryland in the upcoming months. We apologize for any confusion the original post caused. Monday night, Maryland Senate passed legislation allowing direct shipment of wine from wine producers to the homes of consumers, just two days after the House of Delegates passed the same. (See Direct Wine Shipment Coming Soon to Maryland and House OKs Direct Shipping for Wine.) Several steps still remain to make this bill a law, including the signing by the Governor Martin O’Malley, but there is a strong likelihood that wineries will be able to directly ship to customers in the upcoming months. Whereas this step is a great victory for wineries and connoisseurs, as thirty-six states and the District of Columbia allow direct shipment, it poses a question of compelling interest: does this new law go far enough? Some concerns from commentators are that the bill only allows 18 direct shipments per year from wineries. Additionally, deference is given to wineries and producers with respect to direct shipment while forgoing the inquiries from state retailers. (It is suggested that allowing retailers to engage in direct shipment would heighten sales for private business and public entities, perhaps especially if Maryland legislators vote to raise sales tax on alcoholic beverages. In the future, Maryland legislators will vote on whether to raise the sales tax on wine, beer, liquor, which is postulated to raise $90 million in state revenue.) Irrespective, this is a large step for Maryland in the direction favorable to the majority of its cohorts. The budding question is as follows: which state is next?

DISCLAIMER: This blog post is not intended as legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

Selfishly, I’m hoping Massachusetts is next but things seem to be moving slowly here.

I was impressed with the way Maryland commissioned a study of the situation to guide its decision making process. We may not agree with excluding retailer direct shipments but at least you can understand how the decisions were made.

This is in contrast to the situation in Massachusetts where bills seem to be proposed without background information for legislators to consider.

Hopefully the transparency with which retailer direct shipments were excluded (to protect Maryland retailers) will provide leverage to allow retailer shipments in the future.

Thank you so much for the visit and the comment. I definitely agree; it would be great for Massachusetts to be the next state to allow direct shipment. I feel it will be likely at some point, given the ongoing pattern of states to approve direct shipment. Let’s hope it continues!

It is easy to see how this could be a step in the right direction. But after reading the original House version and the revised Senate version that is now headed to the Governor I wonder if we are settling for an unsatisfactory bill.

The retailer issue is difficult to overcome as is evidenced by litigation in Texas heading as far as the Supreme Court (only to get turned away). There are a couple of changes the Senate made that I feel are cause for concern.

The decrease in the aggregate limit is more than just a lowering from 24 cases/yr to 18 cases/yr. The House version allowed 24 cases to any consumer or delivery address. The Senate removed the consumer provision, limiting the amount to 18 cases per delivery address. Assuming an address with two adults over 21 that’s a decrease of 30 cases per year to that address.

The other is removal of the phrase “or person’s agent” when discussing who can ship the wine. This basically limits a wineries options when it comes to shipping the wine. MD direct shipper’s permit holders will not be able to use third party fulfillment houses to ship their packages into the state. Wineries that use fulfillment houses for their shipping needs will have to ship those packages from their own facilities.

Yes, any movement forward on direct shipping is good, but at some point the industry needs to start pushing harder for quality legislation.

The language in this post is unclear. What does” forgoing the inquiries from state retailers” mean? This wine bill is an insult to people who like wine and still are prohibited from joining wine clubs or ordering from retailers. The alcohol lobby that spent almost a quarter of a million dollars as handouts to legislators are sighing with relief. There is no reason for optimism the direct ordering from retailers will get by Annapolis.